Do you want to know how to take care of Bitstamp taxes? We got you covered.
Bitstamp is one the leading crypto exchanges in the market, supporting around 47 crypto assets, while you can trade crypto-to-FIAT (e.g., USD, EUR) and crypto-to-crypto (e.g., against BTC).
Moreover, Bitstmap also offers a passive income investment vehicle, Bitstamp earn, where you can receive crypto interest.
Today, we cover how these investment products impact your Bitstamp taxes if you’re in the US, UK, or Germany.
In this article:
Do you pay crypto taxes on Bitstamp trades?
In the US, crypto-to-FIAT or crypto-to-crypto trades are taxable events, subject to capital gains taxes. If you’re using Bitstamp to trade crypto against FIAT currencies, you’ll have to determine your capital gain on each trade and report it. On the crypto-to-crypto trades, determining the gain is a bit trickier, but it can be easier with the help of a crypto tax software such as CoinTracking.
First, you need to determine your cost basis, meaning the purchase price of the crypto you initially bought. Let’s say you bought 1 Bitcoin at $50K in January 2021. That’s the cost basis of your purchase. Then, in November 2021, you sold 1 Bitcoin at $67K. That is your sales proceeds. The difference between the sales proceeds and the cost basis is your capital gains ($17K).
You need to do the same assessment when trading crypto-to-crypto. In the case of Bitstamp, you would be trading cryptocurrencies pairs against BTC.
Can you tax deduct Bitstamp fees?
In the US, yes, if it’s a trading fee. You can deduct the trading fee out of your sales proceeds, which means your capital gain on the trade will be lower, effectively reducing your capital gains taxes on that trade.
However, if it is a fee for transferring your crypto between wallets (e.g., a transfer fee), it’s considered an investment expense, which is not tax-deductible for individual investors in the US.
Do you pay taxes if you trade on Bitstamp in Germany?
In Germany, crypto trades are tax-free if you hold them for more than 12 months before selling. If you have a gain of less than €600, you won’t need to pay income taxes. If you trade on Bitstamp and follow these two criteria, you won’t have to pay income taxes. More countries offer tax benefits for long-term holders.
Learn more about crypto taxes in Germany from this guide.
Do you pay taxes if you trade on Bitstamp in the UK?
In the UK, if you trade crypto on Bitstamp and have a profit, you’ll be subject to capital gains taxes.
Any crypto-to-FIAT or crypto-to-crypto trade is taxable in the UK. As a result, if you trade (for crypto or FIAT) on Bitstamp, you’ll have to pay capital gains taxes if you pass the annual tax-free allowance. See more details about crypto taxation in the UK.
There are several ways to export your transactions from Bitstamp and import them into CoinTracking. Watch this video to learn the steps:
Do you pay taxes from Bitstamp Earn?
Bitstamp earn is a crypto-interest investment vehicle that you can use to earn APY from Ethereum 2.0 or Algorand. If you lock funds, you'll receive crypto interest in the future.
The program is still not available to US customers, but if it becomes available, any crypto interest you receive from it is a taxable event, subject to income taxes. You would need to determine the Fair Market Value (in USD) of the rewards/interest when receiving it. Check our guides on taxes when receiving crypto staking rewards and crypto interest.
In the UK, in most scenarios, you’ll also be taxed under miscellaneous income as an individual, with exceptions if you’re a business or trade in a professional setting. Find out more here.
Does Bitstamp report to the IRS?
Bitstamp serves US customers, thus it can report information to the IRS when “John Doe” summons are in place, for example.
How to report Bitstamp taxes?
If you trade on Bitstamp, you’ll need to determine the gain/loss on each of your crypto trades and report it on Form 8949 in your taxes. It’s easier to do so by importing your trades into a crypto tax software, such as CoinTracking, that tracks your costs basis/sales proceeds and calculates your capital gains automatically.
In the future, if Bitstamp Earn is available to US customers, you will need to report your income from there (the FMV of the crypto interest you received) on your income tax return.
The best Bitstamp tax calculator: CoinTracking
The best crypto tax software to import and track your Bitstamp trades is CoinTracking.
You can import your trades using CSV or API, track your gains/losses, and generate tax reports according to your preferred accounting method.
Beyond Bitstamp, CoinTracking is your full crypto tax solution for:
DeFi and NFT support with our ETH+DEX importer.
25+ advanced reports, including which coins offer you a tax-free rate.
Automatic capital Gains, according to 12 accounting methods (e.g., FIFO, LIFO, HMRC, ACB), accepted worldwide.
Generating complete Tax Reports in your country.
Do you pay taxes on Bitstamp?
Yes. In the US, you can be liable for the following taxes when using Bitstamp:
Trading crypto for other cryptocurrencies (e.g., BTC): Capital gains taxes
Trading crypto for FIAT: Capital gains taxes
Receiving interest from Bitstamp Earn (when available in the US): Ordinary income taxes
Bitstamp taxes with no errors: CoinTracking Full Service in the US.
CoinTracking also offers a Full Service for US traders. A crypto reconciliation tax expert from Polygon Advisory Group, a leading US crypto tax firm, will review your CoinTracking account, help fix any errors, and ensure you submit your crypto tax reports error-free.
Do you have any crypto tax questions? Check the best guides:
Do you pay taxes when trading stablecoins?
How is Yield Farming Taxed?
DeFi Taxes: The Complete Guide.
How to save taxes with a Bitcoin IRA.
Do you pay taxes for receiving Bitcoin tips?
Uniswap Taxes Guide
How to calculate taxes with Bitcoin dollar-cost averaging?
FIFO for crypto taxes? Implications of accounting methods.
NFT Taxes: The Complete Guide.
2021’s NFT guide (with taxes).
Is Bitcoin taxable? The ultimate guide for 2021 taxes.
Do you pay taxes on Bitcoin debit cards purchases?
How to reduce your crypto taxes?
Crypto tax loss harvesting: Here’s what you need to know
This post is part of the Crypto Taxes AMA series. Follow our weekly AMAs on Twitter where our expert CPA, Sharon Yip answers your crypto tax questions. You can download 30+ AMA crypto tax reports for free.
Disclaimer: All the information provided above is for informational purposes only and should not be considered as professional investment, legal, or tax advice. You should conduct your own research or consult with a professional financial advisor when investing.